Page 13 - Interest Rates

RBI repo rate cut possible only in Jul-Sep quarter next year: Icra

Domestic ratings agency Icra on Monday said it expects a rate cut by the Reserve Bank to happen only in the July-September quarter next year. The overall cuts in the cycle will be a "shallow" 0.50-0.75 per cent, the agency said. A rate hike by RBI is possible only if the headline inflation is at over 6 per cent for two consecutive quarters, the agency said. "The MPC's (Monetary Policy Committee) latest forecasts suggest inflation will remain above 5 per cent through Q1 FY2025, based on which we have pushed out our forecast for the earliest cut to Q2 FY2025," the agency said. The official data released on Monday said consumer price inflation (CPI) spiked to a 15-month high of 7.4 per cent for July. "The data for food prices for early August 2023 is not very promising, and we expect the headline CPI inflation to print above the 6.5 per cent mark in August, before cooling off materially in September," its chief economist Aditi Nayar said. She attributed the much sharper than expecte

RBI's interest rate decision pragmatic, to keep EMIs stable, say experts

The RBI's decision to keep interest rates unchanged is pragmatic and on the expected lines, and ensures that EMIs on home and consumer loans remain stable, experts said on Thursday. The Reserve Bank of India (RBI) left its key policy rates unchanged for a third straight meeting but signalled tighter policy if food prices drive inflation higher. The monetary policy committee (MPC), which has three members from the central bank and a similar number of external members, held the benchmark repurchase rate (repo) at 6.50 per cent in a unanimous decision. "As expected, the RBI has taken the pragmatic approach and kept the policy repo rate unchanged at 6.5%. The central bank has reiterated its commitment to bring inflation within the target band while continuing its focus on supporting growth," said EEPC India Chairman Arun Kumar Garodia. While exporters are exploring new markets, the fiscal and monetary support remains crucial for the sector, which is key to generating jobs and earning .

10% incremental CRR temporary, will drain out Rs 1 trn from system: RBI

Short-term rates on money market instruments like call money rates, treasury bills and commercial paper are likely to increase by 15-20 bps in the near term: ICRA

RBI seeks greater transparency in floating interest rates of retail loans

As policy interest rates rise, lenders pass on the burden to customers by either raising their monthly payments or increasing the tenor of their loan

RBI to introduce framework to switch from floating to fixed interest rates

The Reserve Bank on Thursday said it will come out with a framework allowing borrowers to switch to fixed interest rate from floating interest rate, a move that would provide relief to borrowers of home, auto and other loans reeling under the impact of high interest rate. Unveiling the bi-monthly monetary policy, Reserve Bank Governor Shaktikanta Das said under the framework, to be put in place shortly, the lenders will have to clearly communicate with the borrowers about tenor and EMI. "The supervisory reviews undertaken by the Reserve Bank and the feedback and references from members of public have revealed several instances of unreasonable elongation of tenor of floating rate loans by lenders without proper consent and communication to the borrowers," he said. To address the issue, it is proposed to put in place a proper conduct framework to be implemented by all Regulated entities to address the issues faced by borrowers, he said. "The framework envisages that lenders should ..

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A pause with abundant caution

Despite the current surge in CPI inflation, bulk of the rise came from food prices rather than in a broad-based fashion

BoE set to join Fed in raising interest rates again amid high UK inflation

The Bank of England is set to raise interest rates Thursday for the 14th time in a row to a fresh 15-year high and keep the door open for further increases in the months to come as it tries to tamp down persistently high inflation. Most economists think the UK central bank will increase its benchmark rate by a quarter of a percentage point, to 5.25 per cent. There had been fears, certainly among hard-pressed households and businesses, that the bank would repeat its outsized half-point increase from June. But figures last month showing that inflation fell more than anticipated to 7.9 per cent eased the pressure to act as aggressively again. With inflation still four times the 2 per cent target, the Bank of England has little choice but to raise the bank rate again and leave the door open to further hikes in upcoming meetings, said Kallum Pickering, senior economist at Berenberg Bank. Though the US Federal Reserve and the European Central Bank raised rates last week, they are thought

BOJ loosens tight grip on rates as prices rise, markets bet on bigger pivot

At a two-day policy meeting that ended on Friday, the BOJ kept unchanged its short-term interest rate target at -0.1% and that for the 10-year government bond yield around 0%

Centre approves 8.15% interest for 60 million EPFO subscribers in FY23

FY23 interest rate is marginally higher than 8.1% for FY22. After the 8.15% payout, EPFO will be left with a surplus of Rs 663.91 cr

RBI likely to maintain status quo in upcoming monetary policy: SBI Chairman

State Bank of India (SBI) Chairman Dinesh Khara on Wednesday said the Reserve Bank of India is likely to maintain status quo in the upcoming monetary policy. "As a bank we don't don't expect rate cut, status quo is likely to be maintained by the RBI," he said at an event organised by industry body CII here. The next meeting of the Monetary Policy Committee of the Reserve Bank of India is scheduled to be held on August 8-10, 2023. In its June 8, policy review meeting, the Reserve Bank of India left its key interest rate unchanged for a second straight policy meeting but signalled that it wants to see inflation moderate more while keeping an eye on the monsoon.

Improving pensions

Policies and regulations can increase the returns on pension funds; these can reduce the politics over the issue

PE investments in real estate down 5% YoY at 1.9 bn in Q1 FY24: Report

Increase interest rates impact investment flows, deal activity muted

Dollar steady before US Fed minutes, yen hovers below intervention zone

The dollar index - which measures the currency against a basket of six major peers, including the euro and yen - was little changed at 103.02, after tracking between 103.75 and 102.75 since early June

Yen tentative, dollar soft as traders weigh US Fed rate hike path

The yen weakened 0.03% to 144.38 per dollar in early Asian hours to kick start the second half of the year having dropped 9% against the dollar in the first six months of the year

Share of loans bearing over 9% interest rate hits 56.1% in March: RBI

The share of loans bearing over 9 per cent interest rate rose to 56.1 per cent in March 2023, in tandem with the monetary tightening measures starting May 2022, said a Reserve Bank report on Friday. The Reserve Bank started raising interest in May 2022 to rein in inflation in the wake of global supply disruptions, following the Russia-Ukraine war. Since then the benchmark short-term lending rate has increased by 250 basis points. However, the RBI did not raise the rate in its last two bi-monthly monetary policy reviews. "Consistent with the monetary tightening measures during 2022-23, the share of loans bearing over 9 per cent interest rate rose to 56.1 per cent in March 2023 from 31.4 per cent a year ago," said the Basic Statistical Return on Credit by Scheduled Commercial Banks in India - March 2023. The RBI further said all population groups recorded substantially higher credit year-on-year growth in 2022-23. The annual growth in lending by metropolitan branches of banks ...

Promising signals of further decline in UK inflation: BoE's Dhingra

Dhingra is one of two members of the BoE's nine-member Monetary Policy Committee (MPC) who have consistently voted against the central bank's interest rate rises since December

Markets have been over-optimistic in foreseeing rate cuts: Rahul Bhuskute

The biggest possible risk for Indian equities and for all asset classes globally is the possibility of delayed interest rate cuts by central banks globally, says Rahul Bhuskute, CIO, Bharti AXA Life

Pakistan hikes policy rate to 22% to secure IMF deal in a last-ditch effort

"The MPC views this action as necessary to keep real interest rate firmly in positive territory on a forward-looking basis," the central bank said in a statement

BIS warns the world economy at critical juncture in inflation fight

Despite relentless rate hikes over last 18 months, inflation in many top economies remains high, while jump in borrowing costs triggered serious banking collapses since financial crisis 15 years ago